Gary Jones recognized the energy-management opportunity in 1996 and alerted his boss Chris Richardson, then vice president, operations, for the U.S. facilities of Square D and Schneider Electric, North American Division. Jones proposed an enterprise scheme to better manage electrical power used by the company's 20-plus operations in the U.S. As a maker of electrical distribution and control equipment, the company traditionally used its own PowerLogic monitoring equipment on a plant-by-plant basis. "Each of our facilities had systems feeding data to a PC that some local staffer would tend," says Jones, now director of power management operations. The proposal that Richardson decided to support was designed to eliminate the data isolation of individual plants. "Its premise recognized that the data we were collecting would be far more valuable as an enterprise strategy," says Richardson (who became president and CEO in 1998). "The following year we elected to demonstrate the potential by integrating five of our plants under central control. Localized control had cost penalties -- having the right expertise at each plant was expensive, and as a result our plant-by-plant efforts were really hit or miss." Today, after putting 18 plants online -- and with three more queued up to join -- benefits in annual energy savings alone are between $600,000 and $700,000. Those savings hint at the challenges and opportunities that lurk in the global energy crunch. Square D/Schneider not only found recurring savings, but also discovered that its internal success helped validate an enterprise energy-management service. Makers of production equipment are translating energy issues into machines that offer compelling operating benefits. In every instance the benefits accrue to managements that ask tough questions about the old presumptions about the use of energy, whether in their operations or in their products. Negotiation Advantage Square D's Richardson says he was prepared to realize savings with the enterprise approach, but the amount possible was a big surprise. Other pleasant surprises followed. "For example, we learned that after the program was running, we often knew more about what was going on in the utility distribution system than the energy supplier did," he points out. "Having that information helped us reduce costs related to poor power quality and put us in a better negotiation position with this critical vendor. "We also learned that the costs we had associated with using electricity as a part of our operation were among the largest potential gold mines of savings that we had. Our purchasing staff had already focused on finding savings with our other suppliers and armed with the needed information [on energy] they could do the same thing here." Richardson adds: "The first and most important step was getting senior-management commitment to examine and improve the [energy savings] aspect of our operation on an on-going basis and putting a plan and organization in place to do it." The company's enterprise system has approximately 180 monitoring devices spread across the 18 plants. Collected data is uploaded to a central database for monitoring and report purposes. Monthly and quarterly reports are routine. Initial investment for the first year (1996) was $497,000 plus $494,000 more in 1997. The company budgets $160,000 for recurrent annual costs. The benefits of the enterprise approach come from a wide variety of sources. For example, $23,000 per year comes from one plant that could prove with the system's data that it qualified for the utility's more favorable high-load-factor rate. At another facility data analysis led to paring $4,000 from annual natural gas costs. All the operation had to do was reduce boiler pressure. Other savings accrued from reducing the number of power-quality (PQ) events. EPRI (formerly known as the Electric Power Research Institute) estimates that the cost of each event averages $5,000 and an industry feeder suffers an average of 42 events per year, says Richardson. PQ data from the company's North Carolina plant was able to show that problems were not in the "acts of God" category and hence could be resolved by the utility. Coordination at the utility was at fault. Richardson also found that energy-management data could be substituted for some capital-equipment expenditures. He says one of his plants was able to defer the installation of a new $52,000 transformer when data showed that existing equipment could handle new production machines even at peak demand times of the year. Another instance deferred a $7,000 expenditure, he adds. There is a wide range of intangible benefits from enterprise-wide energy management, as well. One data audit discovered a grounding problem that was not only a safety issue, but also was causing expensive failures of PC boards in CNC machines. Richardson says another Square D/Schneider plant uses the measurement and verification data to help determine which facility improvement project will provide the biggest payback. He also claims maintenance benefits. "It reduces time in troubleshooting production machines because some data is readily available." Ultimately, the biggest benefit of energy management in a manufacturing context is continuity of production, says Randall Sagan, facilities electrical engineer, Mercedes-Benz U.S. International Inc., Tuscaloosa, Ala. (The 1.2-million-square-foot plant, dedicated to the production of the M-Class sport utility, is a customer for PowerLogic systems and components.) Adds Sagan: "Managing power quality is an increasingly important issue as we install more and more automation, programmable logic controllers (PLCs), and other electronic devices that are increasingly sensitive to PQ problems. Manufacturing processes are becoming more and more susceptible to power quality issues. "If you have [energy and PQ] disturbances that are interrupting production, then the best way to be able to respond to that starts with having the baseline data. You've got to know what is happening that has caused the problem, and where it's coming from. Having an outage in a production shop that shuts down a PLC puts a premium on knowing if that is something that occurred internal to the facility or is something that came through from the utility. Correcting that problem would be vastly different in those two circumstances. And you could spend a tremendous amount of money if you try to protect yourself from power disturbances from the utility versus simply having to add a filter or an isolation transformer at a specific piece of equipment. And of course having the data will be a metric of your problem-solving success." Sagan says the energy-management system is a very important planning tool for a plant expansion now under way. That investment will double the existing 1.2-million-square-foot facility. "It is useful any time we install new pieces of equipment. We can immediately access data on such things as load, capacity and how to feed new equipment." The facility's monitoring equipment also helped it meet its contractual obligations with the utility on power factor correction, Sagan adds. "We promise to maintain 90% power factor or better. To get us started, [the utility] allowed us to get the facility up and running so we could gather power-factor data in various areas. That let us be very specific on where to correct with capacitor and filter banks. We established exactly where that equipment needed to be installed. And in the places where we did put the equipment, we only put in exactly what we needed." The utility levies a penalty for failure to maintain the power factor as agreed. It should come as no surprise that Sagan's strategy is to increase the scope of energy-related data from the facility. "I want to get down to a lower level of detail. For example, I don't yet have the ability to look at individual pumps and other devices that produce chilled water for dehumidification and air conditioning. We're considering going into existing motor control centers and installing PowerLogic devices to add more value to our existing system." Sagan says the other issue driving power monitoring is deregulation. It is creating a plethora of power-rate plans and rate structures reminiscent of cell-phone promotions. To take full advantage of these offerings, power-management structures will have to be in place. "You've got to have the data available to know where you're using electricity and what times you're using it," says Sagan. "Also, as utility costs go up, the natural tendency will be to control or reduce power consumption. Data on the how, when and where of energy consumption will be necessary for any program of cutbacks." Typically, power engineers in a manufacturing plant will know what their total load profile is, but once beyond the main breakers, they really don't have a good feel for how that energy is being used internal to their facility. "We have that information because we have the circuit monitors on every one of our feeder breakers. I can provide detailed breakdown by manufacturing department," Sagan notes. Adds Richardson: "The [deregulation] rules are changing, and fundamentally those who play by the new rules best will take money from those who are not as quick." Energy-Saving Equipment Being quick also applies to looking at energy benefits possible with the latest production equipment, notes Bill Van Ness, president, Van Ness Plastic Molding Co. Inc., Clifton, N.J. He's referring to the plastics-injection-molding machines his company uses to make watering and feeding products for pets. "About four years ago I started hearing about fantastic energy savings benefits attributed to all-electric machines and that started my investigation," says Van Ness. "I found more claims that annual energy savings could be as high as 50% to 60% over conventional hydraulic designs." Intrigued, Van Ness took delivery of his first all-electric -- a 550-ton machine -- in September 1998. His first step was to verify the energy-saving metrics. "As it happened, the production floor was equipped for a proper comparison -- a nearly new hydraulic machine of equivalent capacity," he says. "I ran identical molds in those machines at identical cycles, and the electrical metering equipment verified power savings of 60%. The kicker was that the cost of the machine was about 30% more. At that time, the payback was about three to four years. But with rising energy costs, that payback has decreased to less than three years for us." Van Ness says his machines typically have a 10-year life cycle, running about 6,000 hours per year on a 24-hour-a-day, five-day-a-week operation. He positions the emergence of the all-electric designs as the first major innovation since the introduction of machines with a reciprocating screw. Van Ness also counts other substantial but less obvious benefits of all-electric designs. For example, he found that the machines facilitated production expansions. "They require only one-third the electrical capacity of a traditional hydraulic injection molding machine, so switching to all-electrics means that a plant's electrical service is suddenly able to accommodate many more injection-molding machines before modifications are necessary." At this point, 12 of the company's 26 machines are all-electric designs purchased from Ferromatik Milacron North America, Batavia, Ohio. There are additional savings in a reduced load on the plant's cooling tower. He explains that hydraulic designs require that the oil be cooled in a heat exchanger with water that circulates through a cooling tower on the plant roof. "[Last summer] we suffered through a four-day heat wave reaching 105 F, and our tower water-cooling facility could not handle such extreme temperatures," he notes. "We were forced to shut down our hydraulic injection molding machines. Cooling needs of all-electric designs are limited to mold cooling." He says summer heat also tends to threaten any previously weakened hydraulic lines. "Typical bursts will dump 25 to 50 gallons [of oil] on the floor and last summer we had three of those spills." In addition, the all-electric machines are quieter, cleaner and capable of holding closer processing parameters with better repeatability, says Van Ness. All-electrics suffer less from temperature variations, he explains. "We will be one of those customers whose response to their first all-electric machine is to never buy a hydraulic machine again," he asserts. To accelerate his grasp of all-electric benefits, Van Ness even anticipates early replacement of his remaining hydraulic machines. "In energy crisis areas like California, molding shops have had to either shut down or reduce capacity. If your emergency plan is to use diesel-electric generators as a back-up plan, using all-electrics means that you only need one-third the generating capacity." Ferromatik Milacron, the machine maker, sees its all-electric design as an important differentiator in a global injection-machine market that sells upward of 50,000 units a year. "Only 20% to 25% of the 60 major vendors currently have the capabilities to deliver production models of all-electric machines," says Dale Werle, vice president and general manager. That leaves Milacron in a very strong competitive position with the important product differentiation of lower ownership and operating cost for the customer. "Eventually the all-electric plastic injection molding machine will pretty much replace hydraulic designs," adds Werle. "Hydraulically powered machines will endure longest in the higher-tonnage ranges." Milacron isn't betting on the energy savings appeal alone. "Future all-electric designs will increasingly appeal to buyers in terms of speed and productivity as well." Surprisingly, Werle also found that early-adopters apparently based their purchase rationale on the market appeal to their customers. "They were running slow cycles, involving relatively low energy consumption, yet they wanted to embrace the latest technology." Energy-Efficient Design Machine tool builders and users also are addressing efficiency, but the search is complicated by the multipurpose nature of the equipment, notes Mark Tomlinson, vice president, technology integration, Lamb Technicon, a Unova Co., Warren, Mich. He says the designer's challenge is to properly size the equipment to its task. "For example, in the past we would pick a servo motor size and then use it across the board. Today we size our servo motors to the appropriate application. That alone could affect energy consumption up to 15% on the life cycle of a product. If a designer followed the old approach for all of the components of a very complex manufacturing system, a threefold increase in power consumption might have resulted." In machine tools, Lamb Technicon notices a new driver for energy efficiency: the move toward outsourcing. Tomlinson contends that energy costs are achieving a new visibility by being consciously factored into the piece price that OEMs pay. "As the tiers compete on piece price, they are changing how they buy machine tools. They're doing more than merely amortizing the capital equipment cost over the life of a program. Today maybe three programs will be involved, and they're considering such questions as energy consumption, the specifics of usage, reusability and robustness." Tomlinson says those considerations mean more people have to be brought into the machine tool buying decision. "It can't just be a purchasing decision or a manufacturing engineering decision. It needs to be a decision involving purchasing, finance, and manufacturing and industrial engineering." Lamb Technicon is responding with new equipment designs. For example, in September the company introduced the Bobcat high-speed machining center. The design combines a small amount of moving mass with a low center of gravity to help optimize energy efficiency. Tomlinson says the design provides velocity and acceleration comparable to linear motor machines at lower cost and with equal accuracy. It features a 24,000-rpm spindle for high metal removal rates.